By Edwin Folven, 10/24/2013
City still looking to regulate app-based companies
The Los Angeles City Council is grappling whether to regulate web-based transportation services such as Uber and Lyft, with some members calling for the city to have greater enforcement power over the companies.
The companies are currently regulated by the California Public Utilities Commission (PUC), which oversees enforcement of all charter bus and limousine companies statewide, as well as rail service and other entities that provide transportation services other than taxis. Companies such as Uber and Lyft enable consumers to download an app that connects them with drivers who provide rides in their private vehicles for a fee.
Los Angeles City Councilman Paul Koretz, 5th District, said the web-based companies should be regulated by the city — as taxis are. Koretz said public safety is his greatest concern, but also claims the PUC does not consider the environmental impact of the web-based, for-hire vehicles, and there should be review of the impact under the California Environmental Quality Act. Taxis are also required to go to all parts of the city if called so all residents have access to cabs for transportation, according to LADOT regulations. The web-based transportation services can choose which passengers to pick up.
The council considered the issue of regulation on Wednesday, and failed to approve a motion, 7-6, that would have appealed the PUC’s regulations. The council voted, however, to ask the PUC to address concerns about public safety, and to seek support from a state legislator on sponsoring a bill that would give regulation power to the city.
Mayor Eric Garcetti has indicated he would have vetoed any motion the city council approved that would switch the regulation from the PUC to the city. Garcetti spokeswoman Vicki Curry said the mayor believes the web-based companies provide additional transportation options for the public, and the state can adequately ensure that public safety standards are enforced. The PUC created a new enforcement category for the web-based transportation services in July, and in September approved new regulations requiring the companies to register with the state, provide proof that drivers are licensed and insured, and show that criminal background checks are conducted, among other regulations. Curry provided a statement Garcetti made about the web-based companies when the PUC moved forward with plans for regulation.
“This is an exciting moment for Los Angeles as we work to embrace technology to improve our transportation options and save people money,” the statement reads. “This decision allows new, cost-effective solutions while protecting public safety through common-sense regulations. I also look forward to working closely with L.A.’s taxi companies to revisit our existing franchise agreements to adopt similar innovations.”
Koretz claims the web-based companies would jeopardize public safety because the state does not have enough resources to ensure each vehicle is safe, and that each driver meets all the necessary regulatory criteria. Taxis in Los Angeles are regulated by the Board of Taxi Commissioners and the Los Angeles Department of Transportation, which have more resources and are better equipped to handle regulations, he said. The councilman contends that there is nothing to stop someone from creating a website or app, and then driving people around for a fee.
“I see them as the 21st Century bandit cabs,” Koretz said. “The PUC has no way to enforce them. Are people going to get background checks? Yes, they will say they did, but there is no way to ensure that. We are taking their word on drug tests. There is no guarantee that the vehicle is in good condition; there is no guarantee that the driver has insurance or even has a license. If nothing else, I’m hoping that by bringing attention to this, the concerns to the consumer and the worst dangers are worked out.”
Andrew Kotch, information officer for the PUC, disagreed with Koretz’s assessment on the state not having the resources to regulate the companies. He said the PUC has a transportation enforcement bureau that works with law enforcement agencies such as the California Highway Patrol to conduct regular audits of all commercial transportation companies.
“The commission, after thorough review, decided to let them continue operating,” Kotch said. “There are certain rules and regulations they must adhere to. We are very concerned about public safety.”
The PUC has created a list of requirements that all transportation companies must follow. In addition to obtaining a license from the PUC to operate, and ensuring the drivers are licensed, insured and undergo background checks, the companies are required to establish a driver training program, and vehicles are required to undergo a 19-point safety inspection. Kotch said drivers are also required to have a commercial liability insurance policy with a minimum of $1 million per-incident coverage. The insurance regulation is more stringent than the PUC’s current requirement for limousines, Kotch added.
The PUC is still formulating its policy for the web-based transportation providers, and Kotch said the commission is open to suggestions on whether the regulations should become even more stringent.
“It’s a new entity that has come into the marketplace,” Kotch said. “We can and do regulate them.”
Attempts to contact Uber and Lyft’s management were unsuccessful. Koretz added that he hopes the PUC will provide greater assurance that the companies are safe.
“The biggest thing is the safety,” Koretz said. “We should be able to regulate them in the city.”